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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Ken Twining who wrote (715)	9/14/1998 4:56:00 PM
From: Paul Fine	Read Replies (1) \| Respond to of 14638

Layoffs/Quiet Period: Re the 3500 job layoff announcement today, a corrected press release came out and said the layoffs would be in all divisions, including broadband. What is not clear is whether the 3500 jobs includes the 800-900 jobs cut at RTP, announced on Friday. With 80,000 jobs worldwide, this is still a small cut for NT overall(I know, it is a big cut to the 3500 people who lose their jobs). As I stated this morning, I am not relieved to see only a 1/4 pt drop today, given a 150 pt market rally. We finished only 1/2 pt above the low and 1 3/4 below the high. We dropped almost immediately after a gap-up open, and only briefly rebounded during the day to $47. We now have had 4 consecutive days with lower highs and lower lows. This is definitely a technical breakdown in the stock; what is missing is the fundamental cause. I heard back from the Bay IR dept. and was told there is nothing Bay-specific to account for the price drop. Although I have not heard back from the NT IR dept., it seems reasonable to assume the job cuts announced on Fri/Mon have some impact, but it doesn't seem reasonable to believe it was the cause of the drop from $54 to $46 in less than a week. Re NT earnings warning/quiet period, I was told the following: "Nortel has a self imposed quiet period which is 2 weeks before they announce results (Bay's quiet period extended from the third week of the last month in the quarter through announcement date)." This would seem to say that the window for a warning remains open until about 10/7. If any NT employees or channel partners have a sense for how revs are coming in this quarter(particularly in light of the Telllab warning today), please enlighten the rest of us. Paul